85R11844 AJA-D
By: Menéndez S.B. No. 2234
A BILL TO BE ENTITLED
AN ACT
relating to the collection of past due assessments and certain
other charges by a property owners' association.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 209, Property Code, is amended by adding
Sections 209.0061, 209.00611, and 209.00612 to read as follows:
Sec. 209.0061. COLLECTION OF PAST DUE ASSESSMENTS: FEES AND
COLLECTION COSTS. (a) If a property owners' association's
dedicatory instruments authorize the association to impose late
fees on, or recover costs associated with the collection of, past
due regular or special assessments, the association may collect
only the following fees and costs:
(1) a single late fee for each past due assessment that
does not exceed 10 percent of the past due assessment;
(2) if any interest or administrative costs are
authorized by the dedicatory instruments, a monthly charge that:
(A) does not exceed one-half of one percent of
all unpaid past due assessments; and
(B) is payable directly to the association,
regardless of whether the amount is ultimately used to pay the
association's property manager;
(3) if the association sends a follow-up letter
authorized by Section 209.00611(b), a charge for attorney's fees
that does not exceed 25 percent of the past due assessments; and
(4) for a payment plan, regardless of whether the
association is required to offer the plan under Section 209.0062, a
monthly charge that does not exceed three percent of the sum of:
(A) the past due assessments; and
(B) any charges authorized by Subdivision (1),
(2), or (3) incurred as of the date the payment plan is accepted.
(b) A property owners' association may not impose a charge
other than the charge authorized by Subsection (a)(1) before the
31st day after the date the association sends the property owner a
letter that complies with Section 209.00611(a).
(c) A property owners' association may not impose attorney's
fees or any other charges on a property owner for:
(1) documentation or other information requested by
the owner in order to:
(A) confirm the amount of assessments due; or
(B) understand:
(i) an assessment or a related charge; or
(ii) a payment plan being offered to the
owner; or
(2) the negotiation of the terms of a payment plan.
(d) Subsection (c)(2) does not require a property owners'
association to offer a payment plan other than as required by
Section 209.0062.
Sec. 209.00611. COLLECTION OF PAST DUE ASSESSMENTS:
COLLECTION LETTERS. (a) A letter sent to a property owner by or on
behalf of a property owners' association seeking to collect a past
due regular or special assessment must:
(1) be sent to the owner by certified mail to the
address to which the association usually sends invoices or other
official communications and, if the association uses e-mail to
communicate with property owners, to each e-mail address provided
by the owner for that purpose;
(2) itemize each charge the association seeks to
collect and reference to each provision in the dedicatory
instruments on which the charge is based;
(3) state:
(A) a total amount certain that the association
claims is due;
(B) the date on which that amount was determined;
and
(C) that payments made after that date will be
credited as provided by law;
(4) if Section 209.0062 applies to the association or
the association's dedicatory instruments require a payment plan to
be offered, include the terms of an available payment plan that
complies with that section;
(5) state that the owner must pay the total amount
claimed or, if applicable, accept and deliver the first amount due
under the payment plan on or before the 30th day after the date the
letter was sent to avoid additional charges related to collection
of the assessments;
(6) provide the owner with a phone number the owner may
use at no cost to ask questions about the charges or the payment
plan terms;
(7) provide an address to which the owner may send a
check or money order as payment and notify the owner of any
available online payment portal; and
(8) notify the owner that attorney's fees and other
charges may be imposed and that a lawsuit may be filed to collect
the unpaid amount if:
(A) the owner does not pay the total amount
claimed or, if applicable, accept and deliver the first payment
under the payment plan in the time provided by Subdivision (5); or
(B) the owner accepts a payment plan and does not
comply with the plan.
(b) Not earlier than the 31st day after the date a letter
described by Subsection (a) is sent to a property owner, the
property owners' association may send a follow-up letter that
includes a charge for attorney's fees authorized by Section
209.0061(a)(3).
Sec. 209.00612. COLLECTION OF PAST DUE ASSESSMENTS:
LAWSUITS. (a) In a lawsuit filed by a property owners' association
to collect past due assessments, the original petition:
(1) must prominently state that:
(A) the property owner may resolve the entire
claim by paying, on or before the 60th day after the date the owner
is served with the petition, an amount certain stated in the
petition that the association claims is due:
(i) determined as of a date stated in the
petition; and
(ii) that includes only the itemized
amounts described by Subdivision (2); and
(B) any payment received after the stated date on
which the amount certain was determined will be credited towards
the amount claimed in the petition; and
(2) may include a claim only for the following
itemized amounts:
(A) past due regular and special assessments;
(B) costs or fees the association may collect
under Section 209.0061;
(C) filing fees, fees for service of process,
certified mail charges incurred in connection with the suit, and
any other charges paid by the association in connection with the
suit that the association is authorized to collect under the
dedicatory instruments; and
(D) additional attorney's fees in an amount that
does not exceed $500.
(b) A payment received from a property owner after the
stated date on which the amount certain claimed in the petition was
determined must be credited towards the claimed amount.
(c) A property owners' association may not impose any
additional collection-related charges in connection with the past
due assessments being claimed before the 61st day after the date the
association's petition is served on the property owner.
(d) A property owner must be allowed to make a payment in
satisfaction of the claim by check or money order to the attorney or
law firm representing the association.
(e) In a lawsuit described by Subsection (a), the court may
award reasonable and necessary attorney's fees as are equitable and
just.
SECTION 2. Section 209.0062, Property Code, is amended by
amending Subsection (a) and adding Subsection (a-1) to read as
follows:
(a) A property owners' association composed of more than 14
lots shall adopt reasonable guidelines to establish an alternative
payment schedule by which an owner may make partial payments to the
property owners' association for delinquent regular or special
assessments or any other amount owed to the association without
accruing additional monetary penalties other than amounts
authorized by Section 209.0061.
(a-1) A payment plan offered by a property owners'
association for payment of past due assessments, regardless of
whether the association is subject to Subsection (a):
(1) may not be conditioned on payment of any amount not
authorized by Section 209.0061; and
(2) must allow the owner to pay off at any time without
additional penalty or requirement for further payments under the
plan the outstanding balance of the past due assessments and any
charges authorized by Section 209.0061(a)(1), (2), or (3) that were
incurred as of the date the payment plan was entered into [For
purposes of this section, monetary penalties do not include
reasonable costs associated with administering the payment plan or
interest].
SECTION 3. The heading to Section 209.0063, Property Code,
is amended to read as follows:
Sec. 209.0063. PRIORITY OF PAYMENTS; LATE OR PARTIAL
PAYMENTS.
SECTION 4. Section 209.0063, Property Code, is amended by
adding Subsection (c) to read as follows:
(c) A property owners' association must accept a partial
payment on any amount due to the association, regardless of whether
the owner is subject to a payment plan, to be applied in accordance
with this section. If the association uses an online payment
portal, the association may not block an owner's ability to make a
late or partial payment through the portal.
SECTION 5. Section 209.009, Property Code, is amended to
read as follows:
Sec. 209.009. FORECLOSURE SALE PROHIBITED IN CERTAIN
CIRCUMSTANCES. A property owners' association may not foreclose a
property owners' association's assessment lien unless the debt
secured by the lien includes more than $5,000 of debt described by
Section 209.0063(a)(1), (2), or (3) [if the debt securing the lien
consists solely of:
[(1) fines assessed by the association;
[(2) attorney's fees incurred by the association
solely associated with fines assessed by the association; or
[(3) amounts added to the owner's account as an
assessment under Section 209.005(i) or 209.0057(b-4)].
SECTION 6. (a) Except as provided by Subsection (b) of this
section, the changes in law made by this Act apply only to
collection of regular and special assessments that become due on or
after the effective date of this Act. Collection of assessments
that became due before the effective date of this Act is governed by
the law as it existed immediately before the effective date of this
Act, and that law is continued in effect for that purpose.
(b) Section 209.0063(c), Property Code, as added by this
Act, applies to a payment made by a property owner on or after the
effective date of this Act.
SECTION 7. This Act takes effect September 1, 2017.